Correlation Between Sealed Air and VHAI
Can any of the company-specific risk be diversified away by investing in both Sealed Air and VHAI at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sealed Air and VHAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and VHAI, you can compare the effects of market volatilities on Sealed Air and VHAI and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sealed Air with a short position of VHAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and VHAI.
Diversification Opportunities for Sealed Air and VHAI
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sealed and VHAI is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and VHAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VHAI and Sealed Air is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sealed Air are associated (or correlated) with VHAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VHAI has no effect on the direction of Sealed Air i.e., Sealed Air and VHAI go up and down completely randomly.
Pair Corralation between Sealed Air and VHAI
Considering the 90-day investment horizon Sealed Air is expected to generate 0.14 times more return on investment than VHAI. However, Sealed Air is 7.03 times less risky than VHAI. It trades about 0.0 of its potential returns per unit of risk. VHAI is currently generating about -0.17 per unit of risk. If you would invest 3,490 in Sealed Air on November 5, 2024 and sell it today you would lose (67.00) from holding Sealed Air or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.86% |
| Values | Daily Returns |
Sealed Air vs. VHAI
Performance |
| Timeline |
| Sealed Air |
| VHAI |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Sealed Air and VHAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and VHAI
The main advantage of trading using opposite Sealed Air and VHAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, VHAI can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in VHAI will offset losses from the drop in VHAI's long position.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
| VHAI vs. Chester Mining | VHAI vs. American Hotel Income | VHAI vs. Harmony Gold Mining | VHAI vs. BJs Restaurants |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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